Tuesday, April 11, 2017

The Unfriendly Skies

Yes, United's contract of carriage gives them the ability to bump passengers. But United could have — and given the circumstances should have — continued to increase its offer price until it got enough volunteers. At some point, there would have been a rush to give up seats.

The result: Everyone would have gone away happy. The passengers who agreed to get off the flight would have received something they valued more than arriving on time, and United would have been able to get its own employees where they needed to be without raising a fuss.

Instead, United tried to impose its own form of price controls and then have the police enforce its nonmarket decision.

Does that sound familiar to anyone?

It should, because this is precisely what happens when government interferes in any market, either by forcing prices higher or lower, or mandating businesses offer this or that, to accommodate some other alleged social goal — and then forcing everyone to abide by these rules. The result is economic inefficiency, rising animosity and a growing police state.